Osborne says ‘positive news’ as economy grows 0.2%

The UK economy grew by a mere 0.2 per cent in the second quarter of the year – a result Chancellor George Osborne has described as ‘positive news’.
 
The Office for National Statistics (ONS) has reported that gross domestic product (GDP) increased by 0.2 per cent between April and June, down from an increase of 0.5 per cent in the first quarter of the year.
 
The additional April bank holiday, the Royal wedding and the after effects of the Japanese tsunami have been noted as possible causes for the slowdown in UK growth, the ONS noted in a statement today.
 
The agency continues to say that it is ‘not possible to state precisely’ what the overall impact of the ‘special effects’ might have been, but internal analysis has shown that the events caused a 0.4 percentage point drop in services and 0.1 percentage point fall in the production sector.
 
‘These estimates are broad brush and illustrative,’ the ONS statement says. ‘There can be no certainty as to the impact of the special events and there may be other factors at play.’
 
Total services output increased by 0.5 per cent in the second quarter compared with an increase of 0.9 per cent in the previous quarter. Business services and finance propped up the economy during the quarter, providing the largest contribution to UK growth with an increase of 0.7 per cent. Showing that austerity cuts are starting to bite the public sector, government and other services reported zero growth, down from a 1.1 per cent increase.
 
Construction output rebounded, rising by 0.5 per cent in the second quarter compared with a decrease of 3.4 per cent in the first quarter, but total production output fell 1.4 per cent in the past three months.
 
Osborne comments, ‘The positive news is that the British economy is continuing to grow and is creating jobs. And it is positive news too at a time of real international instability we are a safe haven in the storm.
 
‘Our economy is stable at this time because this Government has taken the difficult decisions to get to grips with Britain's debts. Abandoning that now, as some argue we should, would only risk British jobs and growth.’